The minimum differential wage will be introduced starting with the 1st of January 2019

Starting with January 2019, the gross minimum wage will increase and will be differentiated according to the level of education.

The Government approved this week an Emergency Ordinance amending a number of normative acts, including the Labor Code - Law no. 53/2003, and Law no. 279/2005 on apprenticeship at the workplace. Amendments to the Labor Code will come into force on 1st January 2019 and aim to create the legal framework for establishing the minimum gross national salary guaranteed in pay by reference to the criteria for the level of studies.

Initially, the change envisaged differentiation according to the seniority in work, but in the end the Government dropped it, keeping only differentiation according to the level of education.

Also, through the amendments to Law no. 279/2005 on apprenticeship in the workplace, the persons who have completed primary education, registered in ANOFM, and also other categories of persons will have access to first level apprenticeship training programs (general knowledge and basic skills). The aim of the measure is to urgently reduce the workforce shortage at national level, as well as to improve the knowledge, skills and competencies necessary for a job. This will allow people with primary education to enroll in classes.

Coming back to the most important change, the gross minimum wage, we are going to read below what this is, the evolution of the minimum wage in Romania in recent years, and how we are currently positioning ourselves in the region.

At this point, the gross minimum wage is 1,900 lei gross, which means an amount of approx. 1.160 lei net. From the gross salary the state retains 25% social contributions, 10% health contributions, and 10% income tax. Following the publication in the Official Gazette of OUG 96/2018, the gross minimum wage was increased to 2,080 lei, starting with January 1, 2019 for employees without higher education, or employees in positions that do not require higher education. This means a net amount of approx. 1260 lei, with 100 lei more than the current one.

Employees with higher education who have at least one year of experience would receive from January 2019 a minimum gross salary of 2,350 lei, which means 1,413 lei net.

However, not all people with higher education will benefit from this increase. If a person has graduated from a university and has more than one year of seniority, but is employed in a post which does not require higher education or is in a different activity than the field in which he has graduated, he will not benefit automatically of a minimum gross salary of 2,350 lei.

The Government Decision provides:

"(1) Starting with January 1st 2019, the minimum gross national salary guaranteed in payment, a sum in money not including rewards and other bonuses, is set at 2,080 lei per month for a full work program of 166 hours, on average, per month in 2018, representing 12.53 lei / hour.

(2) By way of exception to paragraph (1), starting with 1 of January 2019, for senior staff with a seniority of at least one year, the minimum gross national salary guaranteed in payment, a sum in money not including bonuses and other bonuses, is set at 2,350 lei per month, for a full working program of 166 hours, on average, per month in 2018, representing 14,157 lei / hour. "

The minimum gross national salary is established annually by Government Decision.

In recent years there have been frequent changes in the gross minimum wage, as follows:

In 2018, the gross minimum wage was increased on January 1, from 1,450 lei to 1,900 lei.

In 2017, the minimum wage has been increased since February, rising from 1,250 lei to 1,450 lei.

In 2016, the minimum wage increased from 1,050 lei to 1,250 lei, but only from 1 May.

In 2015, the gross minimum wage was increased in two stages in January from 900 to 975 lei and in July from 975 lei to 1,050 lei.

In 2014, the minimum wage increased in two stages: on January 1 - from 800 to 850 lei and in July - at 900 lei.

In 2013, the minimum wage increased by 50 lei, in two stages: 750 lei from 1 February and 800 lei from 1 July.

The Government has determined that in 2012 the minimum gross salary is 700 lei a month.

In 2011, the minimum basic salary was set at 670 lei. In 2010, the minimum wage was 600 lei, the same as in 2009.
Currently, following the last change, Romania has surpassed several countries in the region in terms of gross minimum wage, and from January 1, 2019 it will be above the level of many nearby countries such as Hungary, Lithuania, Latvia, Bulgaria, Rep. Moldova, Ukraine, Serbia, Macedonia, Montenegro, Bosnia, or Albania.

But with the introduction of differentiation, if we refer to the minimum wage for people with higher education, from January, Romania will overcome the level of the Czech Republic, Slovakia, Poland, Croatia and Estonia, becoming the country with the highest minimum wage in the region, which in our opinion will generate high competitiveness problems in the labor market and will reduce Romania's attractiveness for investors.